India PV sales hit record high in July, up 34% on strong demand and GST cuts

New Delhi: Passenger vehicle (PV) sales in the Indian market surged in strong double digits to an all-time monthly record in July, driven by improved affordability and sustained consumer demand after GST rate reductions.

According to industry estimates, around 469,000 passenger cars, utility vehicles and vans were dispatched from factories to dealerships last month, a 34% increase from a year earlier. The previous record was 460,000 units last October. Since the beginning of this fiscal year, sales rose 25% in April, 27% in May and 24% in June. The data include sales of electric cars as well.

Industry growth was buoyed by strong volumes at Maruti Suzuki, which posted 42% growth in sales to 196,203 units-the highest on record for the market leader. Tata Motors (58%), Mahindra & Mahindra (20%) and Hyundai Motor India (23%) too posted strong on-year growth in July.

'Robust Demand across Categories'
Together with its light commercial vehicle, Super Carry, Maruti Suzuki sold more than 200,000 vehicles in July, a monthly sales record for any automaker in India, said Partho Banerjee, senior executive officer, marketing and sales, at the local unit of Japan's Suzuki Motor company.

"Globally, only two other automakers, both from mainland China, sell more than 200,000 units every month," Banerjee said, adding, "We are seeing robust demand across categories and have pending bookings for 160,000 units." Sales of small cars at Maruti Suzuki rose 63% in July, while those of SUVs grew 48%.

"We were earlier constrained by lack of capacity. Now with two new lines starting in Kharkhoda and Hansalpur, we will be able to meet customer demand. Our market share is growing month-on-month," Banerjee said. The company is particularly witnessing strong demand for CNG vehicles, whose sales peaked at 83,000 units in July. Network stocks of the company currently stand at about 16 days.

The Indian unit of Korean auto major Hyundai, which saw volumes decline by 10% in June on account of a production loss of 13,900 units due to a fire at one of its vendor's facilities, rebounded strongly last month, selling 54,210 units locally.

"We have kicked off the new quarter on a strong note," managing director and chief executive Tarun Garg said. Including exports, July's volume of 75,360 units was the highest ever since the local unit's inception, he added.

Tata Motors continued to hold the second slot in the category with sales of 62,611 units in July. At Mahindra, Nalinikanth Gollagunta, CEO-automotive division, said the company saw all-round traction across the portfolio in July and grew volumes to 60,048 units. In the two-wheeler segment, too, demand largely remained healthy. Market leader Hero MotoCorp posted a 22% increase in local sales to 501,403 units last month, while Honda Motorcycle & Scooter India reported a 2% rise, dispatching 476,436 units. Royal Enfield's sales rose 38% to 105,317 units and Suzuki Motorcycle sold 123,216 units, up 28% from a year earlier.

In the commercial vehicle segment, leader Tata Motors sold 33,876 units last month, a 28% increase from July last year. In farm equipment, Mahindra's volume grew 21% to 32,643 tractors in July.

Veejay Nakra, president, Farm Equipment Business at Mahindra, said: "Significant recovery in rainfall, improved reservoir levels, accelerated kharif sowing aided by government support and healthy farm cash flows have led to positive rural and farmer sentiment."